VIRTUS ALLIANZGI CONVERTIBLE FUND* - September 30, 2021 *Effective February 1, 2021, this Fund's name and investment adviser have changed. The ...
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VIRTUS ALLIANZGI CONVERTIBLE FUND* September 30, 2021 *Effective February 1, 2021, this Fund’s name and investment adviser have changed. The Fund’s distributor is now VP Distributors, LLC.
IMPORTANT RISK CONSIDERATIONS
Market Volatility Local, regional, or global events such as war, acts of terrorism, the spread of infectious illness or other public
health issues, recessions, or other events could have a significant impact on the portfolio and its investments,
including hampering the ability of the portfolio manager(s) to invest the portfolio's assets as intended.
Issuer Risk The portfolio will be affected by factors specific to the issuers of securities and other instruments in which the
portfolio invests, including actual or perceived changes in the financial condition or business prospects of
such issuers.
Convertible Securities A convertible security may be called for redemption at a time and price unfavorable to the portfolio.
Interest Rate The values of debt instruments may rise or fall in response to changes in interest rates, and this risk may be
enhanced for securities with longer maturities.
Counterparties There is risk that a party upon whom the portfolio relies to complete a transaction will default.
Credit Risk If the issuer of a debt instrument fails to pay interest or principal in a timely manner, or negative perceptions
exist in the market of the issuer's ability to make such payments, the price of the security may decline.
Prepayments/Call If issuers prepay or call fixed rate obligations when interest rates fall, it may force the portfolio to reinvest at
lower interest rates.
Equity Securities The market price of equity securities may be adversely affected by financial market, industry, or issuer-
specific events. Focus on a particular style or on small or medium-sized companies may enhance that risk.
High Yield Fixed Income There is a greater risk of issuer default, less liquidity, and increased price volatility related to high yield
Securities securities than investment grade securities.
Prospectus For additional information on risks, please see the fund's prospectus.
2VIRTUS INVESTMENT PARTNERS
MULTI-BOUTIQUE, MULTI-STRATEGY MODEL
Key Facts:
Virtus affiliates2 Select external
subadvisers
$177.3
Billion in
AUM1
AFFILIATE
10 SHARED SUPPORT
Affiliates2 OPERATIONS AND IT
HUMAN RESOURCES
FUND SERVICES
+ 7 Select
LEGAL AND COMPLIANCE
Subadvisers
FINANCE
PRODUCT MANAGEMENT
DISTRIBUTION AND MARKETING
36
Funds Rated
4 or 5 Stars1
2
Past performance is not indicative of future results.
1As of 9/30/21. The Overall Morningstar Rating is based on risk-adjusted returns, derived from a weighted average of the three-, five-, and 10-year (if applicable) Morningstar metrics.
Analysis includes rated retail mutual funds only (funds with at least three years of history). Funds with A and I or Institutional shares use I or Institutional shares for Ratings otherwise, A
share is used. Please see page 23 for additional Morningstar disclosure. Strong ratings are not indicative of positive performance. 2As of 10/1/2021. Virtus has an ownership interest in
the firm.
3ALLIANZ GLOBAL INVESTORS
At a Glance
Founded in 1998
A wholly owned subsidiary of Allianz SE
AUM of €633 billion*
693 investment professionals across the globe
Established expertise in equities, fixed-income, multi-asset, and alternative investments.
*AUM as of June 30, 2021. Source: Allianz Global Investors US LLC.
4ALLIANZGI INCOME AND GROWTH PLATFORM
ASSETS UNDER MANAGEMENT
ALLIANZ GLOBAL INVESTORS’ INCOME AND GROWTH TEAM STRATEGIES: $65.3 BILLION
Convertibles
$7.2
High-yield High Yield
Bonds $2.2
Short Duration
High Income
$6.5
Fixed Income -
Other
$0.5
Income and
Growth
$49.0
Convertible
Securities
Equities
*Stated assets under management may include both discretionary and non-discretionary assets and may therefore exceed composite assets. Grey bars are for illustrative purposes only.
As of September 30, 2021. Source: Allianz Global Investors US LLC.
5ALLIANZGI U.S. INCOME AND GROWTH TEAM
Our highly credentialed investment team has extensive industry experience and utilizes the firm’s
Global Research Platform
Douglas G. Forsyth, CFA
Portfolio Management/Research/Trading
29 Years Industry Experience, 27 Years at AGI
PORTFOLIO MANAGEMENT/RESEARCH/TRADING
William (Brit) Stickney Justin Kass, CFA Michael Yee David Oberto
32 Years Industry Experience 23 Years Industry Experience 27 Years Industry Experience 18 Years Industry Experience
22 Years at AGI 21 Years at AGI 26 Years at AGI 14 Years at AGI
RESEARCH/TRADING
Joanna Willars Christopher Jackson Ethan Turner, CFA Matthew John
21 Years Industry Experience 8 Years Industry Experience 16 Years Industry Experience 18 Years Industry Experience
15 Years at AGI 8 Years at AGI 9 Years at AGI 15 Years at AGI
Nicole Larrabee Rodrigues Paul Marcian, CFA Kris Metzger Peter Busk
25 Years Industry Experience 11 Years Industry Experience 11 Years Industry Experience 8 Years Industry Experience
20 Years at AGI 3 Years at AGI 4 Years at AGIWHAT IS A CONVERTIBLE BOND?
Convertibles offer investors the advantages of both stocks and bonds
Equity
Straight Bond + Warrant = Convertible Bond
Advantage of Bonds Advantage of Stocks
Objective: Objective:
Downside risk mitigation/claim to principal Principal growth
Interest income Unlimited upside participation
Hypothetical example─not representative of any specific convertible. Convertibles involve the risk factors of both stocks and bonds. They fluctuate in value with the price changes of the
underlying stock. If interest rates on the bonds rise, the value of the corresponding convertible will fall. Funds that invest in convertibles may have to convert the securities before they
would otherwise, which may have an adverse effect on the portfolios’ ability to achieve its investment objective. Source: Allianz Global Investors US LLC.
7BEHAVIOR OF A CONVERTIBLE BOND
PARTICIPATION POTENTIAL, VOLATILITY CUSHIONING
Total
Yield/Busted Return Equity Like
Convertible Bond Value
Upside potential of
CONVERTIBLES
underlying equity
Designed for
downside risk Bond Floor
mitigation from
the bond
Stock Price
Downside Risk Mitigation Upside Participation
Hypothetical example─not representative of any specific convertible. Convertibles involve the risk factors of both stocks and bonds. They fluctuate in value with the price changes of the
underlying stock. If interest rates on the bonds rise, the value of the corresponding convertible will fall. Funds that invest in convertibles may have to convert the securities before they
would otherwise, which may have an adverse effect on the portfolios’ ability to achieve its investment objective. Source: Allianz Global Investors US LLC.
8WHY INVEST IN CONVERTIBLE BONDS?
U.S. convertible bond market
May provide investors with upside participation
ICE BofA US Convertible Index S&P 500 Index
of equities
6.3 May provide investors income and downside
5.2 risk mitigation of bonds
Avg. Quarterly Return (%)
ICE BofA U.S. S&P 500®
Convertible Index Index
Annualized return 10.40% 11.99%
Annualized volatility 11.24% 14.43%
-4.9
-7.3
102 Up Quarters 33 Down Quarters
Past performance is not indicative of future results.
Volatility is represented by standard deviation. Indexes are defined on page 26.
January 1988 to September 2021. Source: Allianz Global Investors US LLC using FactSet, ICE Data Services, Morningstar.
9ALLIANZ GLOBAL INVESTORS U.S. INCOME AND
GROWTH STRATEGIES TEAM
Bottom-up, fundamental process Rigorous and in-depth financial analysis combined with
direct access to top analysts and management teams
Disciplined investment approach Total return focused manager with strong risk management
oversight
Consistent application of Seasoned team that has worked together through multiple
investment philosophy market cycles
Attractive risk/return profile Top-tier manager with consistent historical outperformance
The commentary is the opinion of Allianz Global Investors US LLC. This material has been prepared using sources of information generally believed to be reliable; however, its
accuracy is not guaranteed. Opinions represented are subject to change and should not be considered investment advice or an offer of securities.
Source: Allianz Global Investors US LLC.
10ALLIANZ GLOBAL INVESTORS
INVESTMENT PHILOSOPHY AND PROCESS
Investing in companies poised to benefit from positive fundamental change
Company Proprietary Monitoring
Idea Relative Value
Summary Upgrade Alert and Risk
Generation and Trading
Sheet Model Management
The diagram and statements above reflect the typical investment process applied to the fund. At any given time other criteria may affect the investment process. The diagram and
statements shown above are provided for illustrative purposes only.
Source: Allianz Global Investors US LLC.
11ALLIANZ GLOBAL INVESTORS
IDEA GENERATION
AllianzGI’s resources are focused on identifying qualitative investment opportunities
RESOURCES: PEOPLE
Investment Specializing in company research across all industries
management team Open environment
Leverage fundamental company research from entire team
Cross-check and verification of investment ideas
External research Network of analysts: best insight, local expertise, and most promising companies
Company meetings: first hand evaluation of company management, strengthening
critical relationships
RESOURCES: TOOLS
Technology Instant access to critical data
Hands-on fundamental analysis
Real-time portfolio management
Investment screens Quantifies positive change, sustainability, and timeliness
Evaluates combinations of company fundamentals and technical strength
Generates ideas for hands-on fundamentals analysis
Source: Allianz Global Investors US LLC.
12ALLIANZ GLOBAL INVESTORS
COMPANY SUMMARY SHEET
Team discussion
Fundamental analysis Company description Competitive landscape
Positive catalysts Analyst/company
Key risks Management contact
Basic operating statistics Revenue growth Cash/debt/capital
Operating income/margin expenditures/PPE1/interest
EBITDA margin (earnings before
interest, taxes, depreciation and
amortization)
Issue characteristics Delta/conversion premium Maturity/call structure
Coupon/price Published rating (if available)
Capital structure
1Property,Plant, and Equipment
Source: Allianz Global Investors US LLC.
13ALLIANZ GLOBAL INVESTORS UPGRADE ALERT MODEL
FINANCIAL STATEMENTS
Published rating: B3/B+ Years ended December 31 Projections: Base case
Financial statements 2019 2020 2021 2022 2023 2024
Income statement
Sales 2,242 2,504 2,704 2,812 2,953 3,101
Gross profit 903 1,004 1,068 1,133 1,196 1,259
Operating income 43 81 95 124 136 146
Net interest expense 20 19 26 25 25 25
Net income (loss) 10 37 46 66 74 81 Confirmation of AllianzGI’s
Adjusted eps 0.52 1.02 1.06 1.50 1.69 1.84
EBITDA 97 133 155 184 196 206 philosophy of improving
Cash flow statement operating statistics through
Net income (loss) 10 37 46 66 74 81
Depreciation & amortization 53 53 60 60 60 60 detailed analysis
Working capital 34 (123) 37 (13) (17) (18)
Operating cash flows 118 (2) 143 113 117 123 Compare objective rating to
Capital expenditures 50 55 50 50 50 50
Sale (purchase) of business 0 0 (145) 0 0 0 published rating
Investing cash flows (50) (55) (140) (50) (50) (50)
Change in debt (18) 104 56 0 0 0
Change in equity 0 0 (22) 0 0 0
Financing cash flows (30) 57 22 (12) (12) (12)
Balance sheet & liquidity
Available revolver 270 270 264 264 264 264
Cash & cash equivalents 126 127 151 202 257 317
Total available liquidity 396 397 415 466 521 581
Net property, plant and equipment 142 136 135 141 148 155
Total assets 1,040 1,148 1,171 1,256 1,364 1,480
Debt maturities/repayments 867 948 0 0 0 0
Total debt outstanding 245 348 404 404 404 404
Total equity 411 416 428 482 544 612
Past performance is not indicative of future results.
Source: Allianz Global Investors US LLC. The hypothetical information listed above reflects the typical investment process applied to this strategy. At any given time, other criteria may
affect the investment process. The statements contained herein may include statements of future expectations and other forward-looking statements that are based on AllianzGI’s
current views and assumptions and involve known and unknown risks and uncertain-ties that could cause actual results, performance, or events to differ materially from those
expressed or implied in such statements. AllianzGI assumes no obligation to update any forward-looking statement. Forecasts are not a reliable indicator of future results.
14ALLIANZ GLOBAL INVESTORS UPGRADE ALERT MODEL
OPERATING STATISTICS
Operating statistics reviewed
Published rating: B3/B+ Years ended December 31 Projections: Base case
Objective internal credit Financial statements 2019 2020 2021 2022 2023 2024
Liquidity
rating created Current ratio 1.7 1.6 2.5 2.6 2.7 2.8
Days receivables outstanding 14 14 16 17 17 17
Eight rating factors include: Days payables outstanding 44 41 38 38 38 38
Coverages
– Liquidity EBIT to total interest 2.1 4.1 3.7 4.9 5.4 5.8
EBITDA to total interest 4.7 6.7 6.1 7.3 7.8 8.2
– Capital Structure EBITDA-Capex to total interest 2.3 4.0 4.1 5.3 5.8 6.2
Margins (%)
– Percentage of Capitalization Gross margin 40.3 40.1 39.5 40.3 40.5 40.6
EBIT margin 2.0 3.2 3.5 4.4 4.6 4.7
– Asset Utilization EBITDA margin 4.3 5.3 5.7 6.5 6.6 6.6
Cash flows
– Coverage Ratios EBIT 44 81 95 124 136 146
EBITDA 97 133 155 184 196 206
– Margins Free cash flow 56 (69) 81 51 55 61
Leverage
– Cash Flow Total debt to total assets 0.2 0.3 0.3 0.3 0.3 0.3
Debt to EBITDA 2.5 2.6 2.6 2.2 2.1 2.0
Quantitative rating BBB- BBB- BBB- BBB BBB BBB+
– Leverage Ratios
Past performance is not indicative of future results.
Source: Allianz Global Investors US LLC. The hypothetical information listed above reflects the typical investment process applied to this strategy. At any given time, other criteria may
affect the investment process. The statements contained herein may include statements of future expectations and other forward-looking statements that are based on AllianzGI’s
current views and assumptions and involve known and unknown risks and uncertain-ties that could cause actual results, performance, or events to differ materially from those
expressed or implied in such statements. AllianzGI assumes no obligation to update any forward-looking statement. Forecasts are not a reliable indicator of future results.
15ASYMMETRIC RISK/REWARD PROFILE
Convertible bonds have delivered equity-like returns with less volatility than stocks
12
S&P 500
10 Russell 2000 Index
ICE BofA U.S. Convertible
Index
8
Return (% Annualized)
6
4
2
0
0 2 4 6 8 10 12 14 16 18 20
Risk (% Annualized)
Past performance is not indicative of future results.
Source: Allianz Global Investors US LLC using ICE Data Services; FactSet. January 1988 to September 2021.
Indexes are defined on page 26.
16CORRELATIONS
Convertibles have had lower correlations to core fixed income
U.S. Small Stocks 0.87
U.S. Large Stocks 0.86
Non-U.S. Stocks 0.71
U.S. Gov't. / Credit Bond 0.13
10-Year Treasuries -0.12
U.S. Convertibles
Past performance is not indicative of future results.
January 1988 to September 2021. Source: Allianz Global Investors US LLC using Barclays; ICE Data Services; FactSet. Chart covers longest historical time period for which data for
each relevant index is available. Indexes used: Russell 1000 Index; Russell 2000 Index; ICE BofA Current US Treasury 10 Year Index; MSCI EAFE Index; Bloomberg Barclays U.S.
Government Credit Bond Index. Indexes are defined on page 26.
17MARKET PARTICIPATION
Convertibles have performed well, regardless of the interest rate environment
FALLING INTEREST RATE ENVIRONMENTS RISING INTEREST RATE ENVIRONMENTS
3.0
2.7
2.5
Avg. Quarterly Return (%)
-1.3
101 Up Quarters 34 Down Quarters
ICE BofA US Convertible Index BBG Barclays U.S. Government Credit Bond Index
Past performance is not indicative of future results.
January 1988 to September 2021.
Fixed income up and down quarters are based on quarterly performance of the Bloomberg Barclays US Government Credit Bond Index. Source: Allianz Global Investors US LLC using
FactSet; ICE Data Services, LLC.
18UNIVERSE SIZE
New issuance reached the highest annual level since 2001
351
341
313
293 289
282
263
232
218 221
212 211 212
Billions ($)
208
194
186 188 186
177 178
166 171
155
128
120
104
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
As of September 30, 2021. Source: Allianz Global Investors US LLC using ICE Data Services LLC.
19CONVERTIBLES UNIVERSE SIZE AND NEW ISSUANCE
With $68 billion in new issuance through September, annual new issuance for 2021 is on
track to meet strategist’s upwardly revised targets of approximately $85 billion
140 400
351
341
350
120
Universe size
106
300
100
New Issuance ($, billions)
Universe Size ($, billions)
250
80 211 208 212
194 188 68
186 200
178
171
60 New issuance
51 53
150
44 44
40
40 36 37
100
21
20
50
0 0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
As of September 30, 2021. Source: Allianz Global Investors US LLC using ICE Data Indices, LLC.
Projections are based on assumptions with respect to future events. The actual future events may differ from the assumptions.
20FOUR REASONS TO INVEST
1 Asymmetric Risk/
Reward Profile
Convertibles may provide equity-like return with less volatility
2 Attractive Growth
Opportunities
Given current market dynamics, we expect convertible new
issuance to increase, providing attractive investment opportunities
3 Diversification Convertible bonds have historically shown lower correlations to
core fixed income and stronger correlation to equities
4 Team Allianz Global Investors is a preeminent manager in the
convertible bond market
Experienced team follows a disciplined approach that has
delivered strong returns in all market environments
The commentary is the opinion of Allianz Global Investors US LLC. This material has been prepared using sources of information generally believed to be reliable; however, its
accuracy is not guaranteed. Opinions represented are subject to change and should not be considered investment advice or an offer of securities.
Source: Allianz Global Investors US LLC.
21CHARACTERISTICS AND EXPOSURES
VIRTUS ALLIANZGI CONVERTIBLE FUND
Characteristics Fund Benchmark Top Ten Holdings % of Fund Top Sectors % of Fund
Holdings 136 536 Broadcom Inc 8.00 % Cum Technology 30.07
Conv Pfd Registered Shs 2.14
Delta 0.63 0.59 2019-30.09.22 Series A Consumer Discretionary 17.69
Conversion Premium 22.30% 24.83% Danaher Corporation Cum Healthcare 15.94
Conv Red Pfd Registered Shs 1.91
Current Yield 1.59% 2.29% Series A Media 10.79
30-day SEC Yield 0.63%1 NextEra Energy Inc. Corporate Financials 8.84
Units Cons of Debenture 1.76
30-day SEC Yield 01.03.25 +1PC 01.03.23
0.54%2
(unsubsidized):
Dexcom, Inc. 0.25% 15-nov-
1.69
2025
Credit Quality
Snap, Inc. 0.0% 01-may-2027 1.57
Investment Grade 7.78% 11.61%
Palo Alto Networks, Inc.
1.52
Speculative Grade 9.46% 10.81% 0.375% 01-jun-2025
Match Group Financeco 2, Inc.
Not Rated 82.76% 77.58% 1.51
0.875% 15-jun-2026
Average BB1 BB1 Nutanix, Inc. 0.25% 01-oct-
1.31
2027
Structure Live Nation Entertainment, Inc.
1.31
2.0% 15-feb-2025
Equity-like 31.89% 32.24%
Pioneer Natural Resources
1.22
Total Return (balanced) 46.53% 39.56% Company 0.25% 15-may-2025
Yield-oriented (busted) 21.58% 28.20%
130-day SEC Yield is a standardized yield calculated according to a formula set by the SEC, and is subject to change.
230-day SEC Yield (unsubsidized) is the 30 day SEC yield without the effect of applicable expense waivers.
As of September 30, 2021. Source: ICE Data Services LLC., Allianz Global Investors US LLC.
Holdings and weightings are subject to change.
22PERFORMANCE REVIEW
AS OF SEPTEMBER 30, 2021
ANNPX MORNINGSTAR RATINGSTM Convertibles
Index INST Share Category
27.30%
26.02%
Time Period # of Stars # of Funds
22.70%
20.21%
19.69%
17.37%
Overall ★★★★★ 72
15.23%
14.37%
11.76%
3 Year ★★★★★ 72
9.63%
5 Year ★★★★★ 70
6.37%
4.20%
10 Year ★★★★★ 53
Morningstar ratings are based on risk-adjusted returns.
Strong ratings are not indicative of positive fund performance.
-0.49%
-0.71%
The Morningstar RatingTM for funds, or “star rating”, is calculated for
managed products (including mutual funds, variable annuity and
variable life subaccounts, exchange-traded funds, closed-end funds,
and separate accounts) with at least a three-year history. Exchange-
QTD YTD 1 Year 3 Year 5 Year 10 Year Since traded funds and open-ended mutual funds are considered a single
population for comparative purposes. It is calculated based on a
Inception*
Morningstar Risk-Adjusted Return measure that accounts for variation
*Inception: Class INST: 4/19/93. in a managed product’s monthly excess performance, placing more
emphasis on downward variations and rewarding consistent
Performance data quoted represents past performance. Past performance does not performance. The top 10% of products in each product category
guarantee future results. Investment return and principal value will fluctuate so that receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive
shares, when redeemed, may be worth more or less than their original cost. Current 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1
performance may be lower or higher than the performance data quoted. Please visit star. The Overall Morningstar Rating for a managed product is
virtus.com for performance data current to the most recent month end. This share class derived from a weighted average of the performance figures
has no sales charge and is not available to all investors. Other share classes have sales associated with its three-, five-, and 10-year (if applicable)
Morningstar Rating metrics. The weights are: 100% three-year rating
charges. See virtus.com for details. for 36-59 months of total returns, 60% five-year rating/40% three-year
The fund class gross expense ratio is 0.79%. The net expense ratio is 0.71%, which reflects a rating for 60-119 months of total returns, and 50% 10-year rating/30%
contractual expense reimbursement in effect through 2/1/2023. five-year rating/20% three-year rating for 120 or more months of total
returns. While the 10-year overall star rating formula seems to give
Average annual total return is the annual compound return for the indicated period and reflects the change
the most weight to the 10-year period, the most recent three-year
in share price and the reinvestment of all dividends and capital gains. Returns for periods of one year or
period actually has the greatest impact because it is included in all
less are cumulative returns.
three rating periods. Ratings do not take into account the effects of
Index: The ICE BofA U.S. Convertibles Index tracks the performance of publicly issued U.S. dollar sales charges and loads.
denominated convertible securities of U.S. companies. The index is calculated on a total return basis. The
index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for © 2021 Morningstar, Inc. All rights reserved. The information
direct investment. contained herein: (1) is proprietary to Morningstar and/or its content
providers; (2) may not be copied or distributed; and (3) is not
warranted to be accurate, complete, or timely. Neither Morningstar
nor its content providers are responsible for any damages or losses
arising from any use of this information. Past performance is no
guarantee of future results.
23MARKET PARTICIPATION
Convertible bonds have delivered equity-like returns with less volatility than stocks
3.2 ICE BofA U.S. Convertible Index
2.8
2.5
ANNPX
S&P 500® Index
-2.5 -2.6
-3.7
226 Up Months 112 Down Month
ICE BofA U.S. Convertible Index ANNPX S&P 500® Index
Annualized return 9.69% 11.71% 10.51%
Annualized volatility 12.45% 13.86% 14.68%
Past performance is not indicative of future results.
May 1993 to September 2021.
Up and down months are based on monthly performance of the S&P 500 Index. Volatility is represented by standard deviation.
Source: Allianz Global Investors US LLC.
24$0
$100,000
$150,000
$200,000
$250,000
$300,000
$50,000
4/19/1993
9/30/1993
3/31/1994
9/30/1994
3/31/1995
GROWTH OF $10,000
9/30/1995
3/31/1996
9/30/1996
3/31/1997
9/30/1997
PERFORMANCE
3/31/1998
9/30/1998
3/31/1999
9/30/1999
3/31/2000
9/30/2000
Past performance is not indicative of future results.
3/31/2001
9/30/2001
3/31/2002
9/30/2002
3/31/2003
9/30/2003
3/31/2004
9/30/2004
3/31/2005
April 19, 1993 to September 30, 2021. Inception date: April 19, 1993. Source: Morningstar.
9/30/2005
3/31/2006
9/30/2006
3/31/2007
9/30/2007
3/31/2008
9/30/2008
3/31/2009
9/30/2009
3/31/2010
9/30/2010
3/31/2011
9/30/2011
3/31/2012
9/30/2012
3/31/2013
9/30/2013
3/31/2014
9/30/2014
3/31/2015
9/30/2015
ANNPX
3/31/2016
9/30/2016
3/31/2017
S&P 500® Index
9/30/2017
3/31/2018
9/30/2018
3/31/2019
9/30/2019
3/31/2020
ICE BofA U.S. Convertible Index
9/30/2020
3/31/2021
9/30/2021
25DISCLOSURES AND IMPORTANT INFORMATION
The S&P 500® Index is a free-float market capitalization-weighted index of 500 of the largest U.S. companies. The index is calculated on a total return basis with dividends reinvested.
The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.
Russell 1000 Index is an unmanaged index that consists of the 1,000 largest companies in the Russell 3000 Index and represents approximately 90% of the total market capitalization
of the Russell 3000 Index. It is highly correlated with the S&P 500 Index.
The Russell 2000® Index is a market capitalization-weighted index of the 2,000 smallest companies in the Russell Universe, which comprises the 3,000 largest U.S. companies. The
index is calculated on a total return basis with dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for
direct investment.
The MSCI EAFE® Index is a free float-adjusted market capitalization-weighted index that measures developed foreign market equity performance, excluding the U.S. and Canada. The
index is calculated on a total return basis with gross dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available
for direct investment.
The ICE BofA U.S. Convertibles Index tracks the performance of publicly issued US dollar denominated convertible securities of U.S. companies. The index is calculated on a total
return basis. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.
ICE BofA US Treasury Index tracks the performance of the direct sovereign debt of the U.S. Government. It includes all U.S. dollar-denominated U.S. Treasury Notes and Bonds
having at least one year remaining to maturity and a minimum amount outstanding of $1 billion. Additional sub-indices are available that segment the Index by maturity.
Bloomberg U.S. Credit Index is the credit component of the U.S. Government/Credit index. It includes publicly issued U.S. corporate and specified foreign debentures and secured
notes that meet the specified maturity, liquidity and quality requirements. To qualify, securities must be rated investment grade (Baa3 or better) by Moody’s. The index is the same as
the former U.S. Corporate Investment Grade Index. Unless otherwise noted, index returns reflect the reinvestment of income dividends and capital gains, if any, but do not reflect fees,
brokerage commissions or other expenses of investing. It is not possible to invest directly in an index.
The Bloomberg U.S. Government/Credit Bond Index is a broad-based flagship benchmark that measures the non-securitized component of the Bloomberg Barclays U.S. Aggregate
Index. It includes investment grade, U.S. dollar-denominated, fixed-rate Treasuries, government-related and corporate securities.
Conversion premium is an amount by which the price of a convertible security exceeds the current market value of the common stock into which it may be converted. A conversion
premium is expressed as a dollar amount and represents the difference between the price of the convertible and the greater of the conversion or straight bond value.
Correlation is computed into what is known as the correlation coefficient, which ranges between -1 and +1. Perfect positive correlation (a correlation co-efficient of +1) implies that as
one security moves, either up or down, the other security will move in lockstep, in the same direction. Alternatively, perfect negative correlation means that if one security moves in either
direction the security that is perfectly negatively correlated will move by an equal amount in the opposite direction. If the correlation is 0, the movements of the securities is said to have
no correlation, it is completely random.
Current yield is an investment's annual income (interest or dividends) divided by the current price of the security.
Delta is the ratio that compares the change in the price of an asset to the corresponding change in the price of its derivative. For example, if a stock option has a delta value of 0.65, this
means that if the underlying stock increases in price by $1 per share, the option on it will rise by $0.65 per share, all else being equal.
Standard Deviation measures variability of returns around the average return for an investment portfolio. Higher standard deviation suggests greater risk.
26Virtus (NASDAQ: VRTS) is a distinctive partnership of boutique investment managers,
singularly committed to the long-term success of individual and institutional investors.
We are not constrained by a single investment approach; rather, we provide access to independent,
specialized investment philosophies through our multi-discipline, multi-strategy approach.
We have the flexibility, agility, and responsiveness of a boutique asset management firm with similar product
breadth and investment talent of our larger peers.
We are committed to thoughtfully providing investment solutions, adhering to the highest standards of
product quality, operational excellence, and fiduciary responsibility.
Please consider a Fund’s investment objectives, risks, charges, and expenses carefully before investing. For this
and other information about any Virtus Fund, contact your financial representative, call 800-243-4361, or visit
virtus.com for a prospectus or summary prospectus. Read it carefully before investing.
Not all products or marketing materials are available at all firms.
Not insured by FDIC/NCUSIF or any federal government agency. No bank guarantee. Not a deposit. May lose value.
Mutual funds distributed by VP Distributors, LLC member FINRA and subsidiary of Virtus Investment Partners, Inc.
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